Facebook’s Libra could thrive. But it’s all about the user experience.
On May 2, the Wall Street Journal reported that social media giant Facebook had recruited financial firms and merchants to build its own cryptocurrency. On the same day, Libra Networks was registered in Geneva, Switzerland.
Libra Networks is the new company Facebook envisions for the future of finance. At the annual F8 event for developers, last April, Mark Zuckerberg said that it “should be as easy to send money to someone as it is to send a photo”.
The project seems, indeed, to be aimed at the development of a form of virtual money, the GlobalCoin.
The path to the creation of Libra started in December 2017, when former president of PayPal, Marcus David, joined the Coinbase boards of directors while being the Vice President of Messaging Products at Facebook at the same time.
This would connect two of the most important messaging platforms, Messenger and WhatsApp, into the world of instant payments, rivalling their strongest competitors, Chinese messaging and money transfer platform WeChat.
From then, the path to ‘project Libra’ proceeded steadily. Earlier this year, Facebook acquired a British blockchain company called Chainspace and posted blockchain-related job posts. The latest news come from May 14, when Facebook hired two coinbase compliance managers.
However, the social media giant did not comment on the new subsidiary, only stating that it will focus on “investing, payments, financing, identity management, analytics, big data, blockchain and other technologies.”
Such lack of transparency did not help but worrying the US Congress, mindful of its last juridical intercourse with the social media giant: the Cambridge Analytica scandal.
On May 9, the Senate sent an open letter to Zuckerberg quoting the WSJ reportage and asking seven relevant questions mostly regarding privacy and users’ rights and enquiries on legal matters.
Moreover, skepticism about Libra is spreading around media and the internet. Knowing only bits of information – namely that a company whose stakeholder is Facebook Global Holdings exists and that it operates in the financial industry – is not helping its marketing power.
Nonetheless, talks on implementing the payment system on both WhatsApp and Instagram are underway.
If this is true, I have to admit that now that I’m back in Europe I miss the possibility of sending money to my friends for more or less petty stuff with the same app I use text them. Back in China, WeChat was the most comfortable and intuitive way to deal with money transfer.
Perhaps, in an environment where WhatsApp thrives and WeChat is virtually non-existent, as Europe and North America, and with the growing literacy of people on virtual coins, such project doesn’t sound as reckless.
Unfortunately, we’ll have to wait until further developments.